With the arrival of the fourth quarter of 2021, investors are now looking ahead to 2022 and speculating on the gold price in the coming year. The year 2021 has been volatile, and it isn’t easy to anticipate the prices of precious metals.

Analysts predicted that after reaching a new high in 2020, a new record could be set in 2021. Many limitations have been eased due to the vaccine program’s efficacy in the US, and the economy is recovering as a result. This confidence about the global economic recovery has caused gold to retreat from its 2020 highs, but it remains high in relative terms, and it’s currently trading above pre-pandemic levels.

Key Aspects

The gold price in 2022 has some key aspects to look out for. Let’s take a look at them:

Monetary Policy

The outcome of monetary policy in 2022 is likely to have a significant impact on gold prices. If the economy continues to recover at its current pace and price keeps increasing, the policy will shift to the opposing side. Quantitative earnings may start to decline in late 2021 and early 2022. Interest rates would start to increase; while this would slow the progress, gold prices would undoubtedly decline in 2022.

Political Concerns

Economic growth is repressed by wars and sanctions, though the threat of quarrels can cause gold prices to increase. Relations among the United States, China, and Russia are still strained, which can also affect the gold rate.

The Taliban’s occupation of Afghanistan has instilled panic in the area, and markets are watching to see how other nations react and whether the new authority is officially accepted on the international stage.

Central Bank Order

Following a gap in 2020, to counter the COVID outbreak, many central banks have resumed purchasing gold reserves to safeguard their national treasures. Serbia, Brazil, and a few other countries have included gold in their stockpiles. If the trend continues in the coming year, gold demand will further increase, and the price will remain stable in 2022.

Price Prediction For 2022

Gold price forecasts for 2022 vary broadly, but many analysts expect gold to remain stable at current levels based on this year’s performance. They expect the economic resurgence to carry on.

According to BMO Capital Markets, and UBS Global Wealth Management, gold prices will be around $1,700 and $1,800 per ounce in 2022, sustaining current levels.

Trading Economics predicts that gold will be up to $1,963 per ounce by the end of 2021, whereas Goldman Sachs predicts up to $2,000 per ounce will be achieved by the end of the year. There are signals that global monetary resurgence is slowing, while some suggest that inflationary pressures won’t be temporary and will be far more difficult to alleviate than the Fed.

Gold’s role as a safe haven continues to be supported by several variables over the next year. Any price predictions should always be approached with caution since the price will be volatile and could rapidly increase or decrease as events unfold. An average price estimate may not accurately reflect the highs and lows that the gold price may experience in 2022.

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